Renewable energy replacing coal-fired

COAL-fired power is being replaced by renewable energy and gas, but it will remain the dominant source of electricity for years to come, Federal Opposition resources spokesman Ian Macfarlane said on Monday.

A report by the Electricity Supply Association of Australia detailed how black coal's dominant place in the electricity market was being eroded by coal seam gas and renewable energy in Queensland and New South Wales, while the less energy efficient brown coal was replacing black coal in Victoria.

The report said black and brown coal power stations represented 55% of the nation's power generation capacity, but accounted for 74.9% of all real power generation.

"This is a smaller proportion than the 77.8% in the year prior, declining for a second consecutive year," the report reads.

"Decreasing share of output from coal power station was balanced by an increase in the share of natural gas, wind and hydro.

"Natural gas, including coal seam methane, accounted for 15.5% of generation, up from 14.2% in 2009-10."

Mr Macfarlane said that while renewable energy was on the rise, it was being propped up by the government's Renewable Energy Target of 20% of all domestic power generation by 2020.

"This has nothing to do with the carbon tax, which has only been in place for a month, if that," he said.

"You've got renewable energy on one side, and gas on the other, both taking market share away from coal-fired power.

"But while gas is certainly growing, the renewable sector is being propped up by subsidies, that if you took them away, there would be no sector."

But a spokesman for Climate Change Minister Greg Combet said the report was further evidence the government's renewable energy target was getting closer to its goals.

"Our Renewable Energy Target, coupled with carbon pricing, is expected to drive $20 billion of investment in renewable energy by 2020," he said.

"We also expect to see significant new investment in cleaner gas-fired electricity generation under our Clean Energy Plan.

"This will be good for the environment because it will reduce emissions of greenhouse gases which are contributing to climate change."